Putin proposes SCO bank free of ‘weaponised’ financial systems

Russian President Vladimir Putin has urged members of the Shanghai Cooperation Organisation (SCO) to set up a development bank independent of existing financial mechanisms, arguing that such systems are increasingly being used as tools to exert economic and geopolitical influence, media reports said on Tuesday, September 1.

Addressing the 2026 SCO Summit in Bishkek, Kyrgyzstan, Putin said the proposed bank should be independent of financial systems used as economic weapons. He also said Russia’s trade with SCO countries topped $400 billion last year, reported RT India.


The proposal comes at a time when both Iran and Russia face massive sanctions and aligns with Moscow’s broader efforts to diversify away from the US dollar and Western-controlled financial infrastructure.

Common source of financing among member states

A development bank is a financial institution that finances long-term projects, including infrastructure, energy, transport and other investments aimed at supporting economic growth.

For the SCO, the proposed lender could serve as a shared funding mechanism for projects across member states, helping to strengthen economic cooperation within the bloc. Putin said the institution could play a key role in advancing joint projects that deliver mutual benefits to participating countries.

Russia has been especially vocal about moving away from the US dollar and Western-dominated financial systems since sanctions were imposed following its military action in Ukraine.

Putin said Russia’s trade turnover with SCO countries exceeded $400 billion last year. Moneycontrol quoted him as saying, “National currencies are being used more and more in transactions between our countries. In Russia’s transactions with SCO members, national currencies account for over 98%.”

The proposed bank would form part of a wider effort to develop financial mechanisms within the SCO, said the report.

The SCO has grown significantly since its formation in 2001 by Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. India and Pakistan joined the grouping in 2017, followed by Iran, which became a full member in 2023.

Putin said SCO members should continue strengthening commercial ties. China has also backed greater financial cooperation within the SCO, but turning the proposal into a functional bank could face challenges.

The key question, said the report, is whether member states will embrace an institution intended to function independently of Western financial systems while their banks and businesses remain closely tied to the broader global financial network.